BP faces pressure over Russian stake

April 07, 2014 - 2:20:59 am

People outside a currency exchange in the Crimean city of Simferopol.

London: BP will come under pressure at its annual meeting this week to explain how its decision to take a 20 percent stake in Russia’s biggest oil company Rosneft is going to be affected by the country’s standoff with the west over Crimea.

BP’s annual meeting, to be held at the ExCel centre in east London’s docklands on Thursday, could see a barrage of questions from shareholders over Rosneft, continuing legal threats in the US, executive pay and environmental issues — and the general direction in which the company is headed.

The British oil group has already been drawn into the row over Russia’s annexation of Crimea with calls for Rosneft’s delisting from the London Stock Exchange. The demand came from Bruce Misamore, the former finance chief at Yukos — the oil company that was set up by former oligarch Mikhail Khodorkovsky and later folded into Rosneft while Khodorkovsky was in jail. There is a risk that Russian President Vladimir Putin could expropriate assets from western companies, including BP, said independent analyst Louise Cooper. BP’s Rosneft stake accounts for a third of its production volume and gives it a stake in possible future Arctic exploration.

In addition, BP still operates under the cloud of the Deepwater Horizon disaster.

It has already paid out billions in compensation to victims but could face further penalties of up to $20bn, on top of the existing $40bn bill, if it is found guilty of gross negligence by the US Department of Justice.